Continental Resources joins Marfa basin play

By OGJ editors
HOUSTON, Apr. 19 -- Continental Resources Inc., Enid, Okla., will purchase half interest from Exploration Co., San Antonio, and become operator of a play aimed at shale and conventional formations in the nonproducing Marfa basin in Southwest Texas.

The purchase, for an undisclosed sum, is to close by Apr. 21.

Exploration Co. acquired 100% working interest in 140,000 gross (135,000 net) acres in Presidio and Brewster counties in late 2005 (see map, OGJ, Apr. 10, 2006, p. 33).

A reentry to test the Barnett and Woodford shales is expected to begin during the second half of this year with a second well planned for late 2006, said Exploration Co.

"Lightly explored, the Marfa basin is geologically similar to other gas-prone areas along the Ouachita Overthrust such as the Fort Worth and Arkoma basins," the company said. "It has excellent geochemical characteristics; thick shales ranging from 400 ft to 1,200 ft thick; high gas-in-place potential; is organically rich with good total organic carbon; and a thermally mature gas window. It is prospective for the Barnett and Woodford shales and other plays."

Closely held Continental Resources, owned 90% by its Chairman and Chief Executive Harold Hamm, filed for an initial public offering in March.

Continental Resources operates in the Rocky Mountain, Midcontinent, and Gulf Coast regions. It has interests in projects that target the Bakken shale, New Albany shale, Lewis shale, Floyd shale, and Woodford shale formations.

The company's proved reserves at Dec. 31, 2005, were 116.7 million bbl of oil equivalent. Continental Resources generated $375.8 million in revenues and $265.3 million in operating cash flow in the year ended Dec. 31.